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By Uche Usim
Nigeria’s pension industry maintained its steady growth in September 2025, with total pension assets rising to N26.09 trillion, up from N25.90 trillion in August. The increase represents 0.75 percent month-on-month growth and a robust 23.44 percent year-on-year surge, reflecting sustained investor confidence despite mixed capital market conditions.
Data released by the National Pension Commission (PenCom) also showed that contributor registration under the Contributory Pension Scheme inched upward by 0.42 percent to 10.93 million, indicating continued onboarding of new participants even as economic challenges persist.
Government instruments remain the backbone of pension investments, though their performance was mixed. Total FGN Securities dipped 0.50 percent to N15.75 trillion, largely due to declines in FGN Bonds held to maturity, which fell 3.37 percent to N12.84 trillion, alongside Sukuk down 5.83 percent and Agency Bonds falling sharply by 18.42 percent. However, Treasury Bills jumped 2.50 percent to N616.33 billion, Green Bonds rose 7.69 percent to N13.46 billion, and State Government Securities increased 1.33 percent to N240.91 billion. Government instruments still account for 60.35 percent of total pension assets, highlighting a conservative stance amid inflationary pressures and exchange rate volatility.
Equity investments recorded modest gains, with domestic equities up 1.47 percent to N3.66 trillion, representing 14.03 percent of total assets, while foreign ordinary shares were nearly flat, rising 0.04 percent to N277.49 billion. This suggests fund managers are cautiously increasing exposure to the Nigerian stock market.
Corporate debt securities also edged higher, up 0.12 percent to N2.24 trillion. Corporate Bonds held to maturity gained 1.41 percent to N1.41 trillion, offsetting a 2.29 percent decline in bonds available for sale to N785.39 billion. Corporate debt now accounts for 8.58 percent of total assets, showing slow but steady momentum.
Money market investments provided stability, rising 0.74 percent to N2.42 trillion. Fixed deposits and bank acceptances grew 6.14 percent to N1.99 trillion, and foreign money market instruments surged 31.73 percent to N124.02 billion. Commercial paper declined 29 percent but still accounts for 9.29 percent of pension assets. Mutual funds fell 3.32 percent to N218.98 billion, reflecting a cautious approach by fund managers.
Alternative investments posted mixed results. REITs surged 23.61 percent to N98.11 billion, signaling renewed interest in real estate-backed securities, while open and close-end funds tumbled 17.84 percent to N120.88 billion. Private equity declined 4.66 percent to N260.53 billion, and real estate assets dipped 4.42 percent to N243.35 billion. Alternatives now represent just 0.84 percent of total pension assets, pointing to potential growth as the market matures.
One notable development in September was the substantial increase in cash holdings and other residual assets, which surged 78.45 percent to N518.95 billion, now representing 1.99 percent of total pension assets. This sharp rise likely reflects a tactical shift toward liquidity amid market fluctuations.
Analysis by fund category reveals steady growth across both RSA funds and legacy schemes. Fund II, the most widely held fund among active contributors, edged up 0.50 percent from N10.90 trillion to N10.96 trillion, accounting for 42.1 percent of total assets and underscoring strong inflows and solid investment performance.
Fund III, designed for older contributors, also recorded a modest increase of 0.61 percent, rising to N6.73 trillion and contributing 25.82 percent to the overall portfolio. Fund I grew by 1.86 percent to N396.39 billion, while Fund IV rose 2.98 percent, reflecting the conservative approach of its investments. Fund V and Fund VI, which cater to micro-pension contributors, experienced moderate growth of 1.79 percent and 5.76 percent, respectively. Meanwhile, existing schemes and CPFA accounts contributed 12.01 percent and 10.47 percent to total assets, reinforcing the broad-based growth trajectory across both legacy and institutional schemes.
The September 2025 data highlight the resilience of Nigeria’s pension industry, demonstrating that assets continue to expand even amid persistent market volatility and macroeconomic pressures. While government bonds remain the dominant investment due to their relative safety, the measured uptick in equities and REITs signals growing diversification and a gradual appetite for market-driven returns.
